Marks & Spencer sees festive revenues slump

Marks and Spencer has said its trading was “robust” over the Christmas period, but modest growth in food sales failed to offset big declines in its clothing division.

Its overall trading performance in the 13 weeks to 26 December was down sharply on last year.

UK revenues for the period were £2.52bn, 8.2% lower than last year.

M&S blamed “on-off restrictions and distortions in demand patterns” due to the coronavirus crisis.

Chief executive Steve Rowe thanked staff for “a first-class execution of Christmas for our customers in near impossible conditions”.

The High Street stalwart said customers had responded to its “innovative seasonal product” during the four-week run-up to Christmas.

Like-for-like food sales had risen 2.6% during the period, it said.

However, clothing and home sales fell by nearly a quarter.

“Near-term trading remains very challenging, but we are continuing to accelerate change under our Never the Same Again programme to ensure the business emerges from the pandemic in very different shape,” Mr Rowe said.

On the positive side, M&S said its tie-up with online firm Ocado had produced “very strong” results, while customers had responded to its “innovative seasonal product” during the four-week run-up to Christmas.

Ross Hindle, retail sector analyst at Third Bridge, said: “Despite the pressure faced by their clothing division, the M&S food division is expected to deliver solid results, propelled by both stockpiling and its Ocado partnership.

He pointed to reports that M&S was poised to acquire the Jaeger clothing brand as a possible way forward, saying it “hints at the potential for a more aggressive shift into the multi-brand space”.

“M&S have numerous large stores which could be filled with non-M&S merchandise in order to drive their top-line. The risk here is whether such brands might cannibalise M&S branded products,” he added.